Texas Owes The Medicaid Program $57.8 Million

The state of Texas received nearly $58 million from the federal Medicaid program for health services that did not qualify for reimbursement — and it may be asked to return part of the money.

Payments made to six facilities within the University of Texas academic health system were calculated in a way that did not meet federal and state requirements, according to an audit released this month by the Department of Health and Human Services’ Office of the Inspector General.

The federal Centers for Medicare and Medicaid Services said it will be reviewing the report and working with the Texas Health and Human Services Commission to come up with a solution.

The supplemental physician payment program in question started in October 2006 and ran about five years. The goal was to encourage group practices owned or operated by the state to take on more low-income patients.

The program would ultimately boost the amount of money the groups received from Medicaid, bringing the payments closer to what a private insurer would have reimbursed.

The inspector general’s audit aims to identify waste, mismanagement and abuse of federal health services. The audit found that facilities were erroneously reimbursed for health care by providers who were not eligible for Medicaid money and for services not reimbursable by the federal health insurance program. In some cases, claims were “overstated,” the report said.

Though the supplemental payment program took effect in 2006, reimbursements could be collected from earlier years. Of the more than $283 million in supplemental payments from Medicaid to the UT health institutions between mid-2004 and late 2007, more than a third was an overpayment resulting from bad calculations.

In its audit report, the inspector general recommended that the Texas Health and Human Services Commission refund the federal Centers for Medicare and Medicaid Services a portion of the money.

The commission had a chance to review the report earlier this year. In a letter to the inspector general’s Office of Audit Services in April, the state said it would come up with a resolution one year from the date of the final audit report.

The University of Texas responded that its institutions “are prepared to make full restoration,” to the extent that the reimbursement formulas were incorrect and led to elevated payments. “We await final determination from [the Centers for Medicare and Medicaid Services] about what will need to be repaid,” it said.

The latest audit is the second in a series of three by the inspector general’s office. The first, released in 2014, found that the University of North Texas Health Science Center owed the federal government $746,461. The state has refunded the money, a representative from the Centers for Medicare and Medicaid Services said in an email Monday.

In both the 2014 report and the one recently released, the state of Texas says it contracted with Boston-based Public Consulting Group in 2007 to develop the methodologies used to make the calculations. Public Consulting Group did not respond to a request for comment.

The inspector general plans to release the third report, on the Centers for Medicare and Medicaid Services’ payments to the Texas Tech University Health Sciences Center, later this year.

The supplement program analyzed in the inspector general’s reports is specific to the state of Texas. Each state establishes agreements with Medicaid. But nationwide, maximizing federal reimbursements while not breaching the established requirements has been an ongoing problem and something the audit teams say they will continue to investigate.

Summary: The state of Texas received nearly $58 million from the federal Medicaid program for health services that did not qualify for reimbursement — and it may be asked to return part of the money.

Payments made to six facilities within the University of Texas academic health system were calculated in a way that did not meet federal and state requirements, according to an audit released this month by the Department of Health and Human Services' Office of the Inspector General.

The federal Centers for Medicare and Medicaid Services said it will be reviewing the report and working with the Texas Health and Human Services Commission to come up with a solution.

The supplemental physician payment program in question started in October 2006 and ran about five years. The goal was to encourage group practices owned or operated by the state to take on more low-income patients.

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